The church has paid out more than $17 million to abuse victims through the scheme.

But victims were told if they chose to go to police, they were no longer eligible for compensation.

Current compensation cap not adequate

Richard Leder, who has been the church's lawyer since 1992, took the stand next.

He is a partner of Melbourne law firm Corrs Chambers Westgarth, which has represented the Catholic Church for 50 years.

Mr Leder designed the Melbourne Response with Archbishop George Pell in 1996.

He told the commission about how he began defending the church and the Melbourne archdiocese against claims of abuse from 1992.

"The view was taken that defendants did not have legal responsibility for the illegal acts of priests," he said.

Mr Leder said that view extended to a program that provided counselling services to victims.

"At the time, even this involved controversy as there was concern that providing counselling services may be taken to be some form of tacit admission of liability," he said.

Mr Leder said he believed it was a commonly held view of parishioners and figures in the church that they "did not put money in the plate each Sunday in order to pay for the criminal acts of priests".

He also gave his understanding of the nature of the offences complained of by victims.

"It's the nature of paedophilia that if a paedophile is attracted to one child it's entirely probable that they will be indiscriminate," Mr Leder said.

Mr Leder also acknowledged the Melbourne Response's current cap of $75,000 could be perceived as not being adequate for the pain and suffering caused to victims.

"As things stand today it is clear that for some victims the ability to receive only up to $75,000 in lump sum compensation indicates that the compensation of the Melbourne Response is not achieving the objective that was set out," he said.

"It was set out to achieve in terms of delivering a recognition - a financial recognition of the harm, and I'm absolutely supportive of the commitments that the Archbishop (Denis Hart) has made to review the matter."